Gates sings new online tune

The music industry may soon be another notch on the bedpost of the world's richest man, Micro-soft boss Bill Gates, who yesterday teamed up with the singer Peter Gabriel to sell pop songs over the internet.

The deal means the two biggest names in computer software, Microsoft and Apple, now dominate online music sales. Apple's service iTunes has sold 6.5 million tracks since launching in the US three months ago, succeeding where the record labels have failed.

Apple's iTunes has proved internet users will pay for music, even though pirated songs are widely available for free through services such as Kazaa.

Like Apple, which sells tracks individually for US99 cents ($1.50), Microsoft's OD2, launched in Britain this week, will charge 75p ($1.85) a track and allow consumers to burn CDs or copy tracks to portable players like Apple's iPod.

Neither service is yet available in Australia, although Apple is reportedly working on introducing iTunes here soon.

The Australian Record Industry Association reckons that about 3.4 million Australians have illegally down-loaded music files via services such as Kazaa. Up to 10 per cent of all music in Australia is acquired illegally, it says.

The Australian music industry met at Homebush Bay yesterday to consider the problem. At the conference the ARIA boss Stephen Peach sat on a panel alongside Kevin Bermeister, who has been linked to Kazaa, the net's leading free song swapping service.

The pair refused to be photographed standing together.

A leather-clad Mr Bermeister accused the record labels of stalling the development of the music industry while it fought new technology. "The music labels have deferred their day-to-day operations to attorneys involved in litigation," he said.

Mr Peach responded: "The industry is not resisting technology, but resisting business models which ensure the music industry will not survive. It is not a victimless, harmless activity."

Mr Bermeister last year orchestrated the takeover of Kazaa by the Vanuatu-based start-up Sharman Network, but continues to deny any investment or commercial role in Kazaa.

Instead he says he has spent much of the past five years trying to develop a legal music download adjunct to Kazaa, which, he says, the record labels have rejected.